Comment from Brian Laegeler, principal, Touchdown Ventures
Does it matter how many CVCs invest, or in which round they join the syndicate?
The value of having a corporate venture capital (CVC) investor on a startup’s cap table remains a topic of debate within the venture capital community. To help inform the discussion, I turned to a 2008 study by Vladimir Ivanov and Fei Xie, who established, for VC-backed startups, a direct relationship between having at least one CVC investor and higher initial public offering prices, based on price-to-sales multiples. The relationship shown by Ivanov and Xie held over a 20-year period from 1981
to 2000.
Ivanov is currently a financial economist at the Securities and Exchange Commission, and Xie is a finance professor at the University of Delaware. Per the authors, CVCs “aid in the growth and maturation of their portfolio companies” through “access to markets, technical assistance and credibility”. The effect they observed was strongest with…
